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Who Will Inherit Your Online Accounts and “Cyber” Assets?

September 2011

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What happens to my online accounts when I die?

These days, using a personal computer is just a normal part of life. You may have email or online accounts that require a password, or you may have pictures, videos or documents stored online or on your hard drive. You may even maintain a blog or website. Like your physical assets, these "digital" or "cyber" assets can have both sentimental and economic value. Chances are, nobody else knows your cyber assets even exist, and if they do, they may not know where those assets are stored or how to access them. It is important that you make plans for the disposition of your cyber assets in the event of your incapacity or death. If you do not, your survivors may have to deal with time-consuming and costly searches, or worse, the assets may be overlooked and lost altogether.

What happens to your cyber assets at your death depends on what type of asset it is, and while the laws regarding cyber assets are not well settled, there are some broad guidelines. Domain names, once registered, become your personal property under property law, and your websites and blog content are yours under federal copyright law. These types of cyber assets are clearly defined by law and are transferable to your heirs (e.g., through your will). On the other hand, certain online accounts, such as email accounts, Facebook, Twitter, eBay or PayPal, may not be classified as property in the legal sense; you are merely given a license by the website when you agree to its terms of service. Under these terms of service, transferability of your accounts may be limited or even prohibited altogether. Terms of service vary widely from site to site. Some sites, such as YouTube, will allow persons with legal power of attorney to access your accounts, and they post instructions on how to do so. Other sites, such as Facebook, will put your accounts into a "memorial state." Many sites, however, will terminate and permanently delete your accounts upon notification of your death. You should read and understand all terms of service and make any necessary legal arrangements so your heirs will have access to your accounts.

Note: On the flip side, you may have certain private accounts to which you want to ensure that no one is given access and which will be terminated immediately upon your death.

 

How do I include my cyber assets in my estate plan? 

Your cyber or digital assets may have sentimental and/or economic value, and you should consider including them in your estate plan.

Here is how to do this:

  1. Identify your cyber assets. They include (a) domain names, websites, and blogs, (b) photos, videos and documents stored on sharing sites such as Flickr, YouTube and Google Docs, (c) email accounts, (d) online bank, credit card, investment and other such accounts that typically require a password, (e) accounts with online companies such as Facebook, Twitter and eBay and (f) documents, spreadsheets, photos and other such items that are stored on your computers, hard drives, DVDs, smartphones, flash drives and other offline or online servers or backup servers.
  2. Understand which assets are transferable to other persons and which are not. Your domain names, websites and blogs are transferable under property and copyright laws; however, your online accounts may or may not be transferable, depending on the online site's terms of service. In many instances, you may merely have a license. Read all terms of service to understand what can be done with the account upon your death. You will find that many accounts will automatically terminate upon notice of your death, and other accounts, such as one on Facebook, may be put into a "memorial state."
  3. Inventory your cyber assets. List all your assets indicating (a) where they are located, (b) how they are accessed, including URLs, usernames, and passwords, (c) what you wish to have happen to the asset at your death (e.g., transfer to an heir, terminate, memorialize) and (d) who will be responsible for carrying out those wishes (e.g., spouse, executor). Refer to but do not include this inventory in your will, because wills become public and this is private information. Put it in a safe place and let others know of its existence.
  4. Include specific bequests of certain valuable cyber assets, such as domain names, websites and blogs, in your will and execute powers of attorney for those accounts that will require it.

 

New Wealth Advisors is an affiliate company of MFA – Moody, Famiglietti & Andronico, LLP. The views, opinions, positions or strategies expressed by New Wealth Advisors, the authors of this article are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of MFA – Moody, Famiglietti & Andronico, LLP.  MFA makes no representations as to accuracy, completeness, suitability, or validity of any information within this article and will not be liable for any errors, omissions, or delays in this information or any losses, injuries, or damages arising from its display or use.

This article contains general information that is not suitable for everyone. The information contained herein should not be construed as personalized investment advice. Past performance is no guarantee of future results. There is no guarantee that the views and opinions expressed in this article will come to pass. Investing in the stock market involves gains and losses and may not be suitable for all investors. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

New Wealth Advisors, LLC (New Wealth Advisors) is an SEC registered investment adviser with its principal place of business in the State of Massachusetts. New Wealth Advisors and its representatives are in compliance with the current notice filing requirements imposed upon registered investment advisers by those states in which New Wealth Advisors maintains clients. New Wealth Advisors may only transact business in those states in which it is notice filed or qualifies for an exemption or exclusion from notice filing requirements. Any subsequent, direct communication by New Wealth Advisors with a prospective client shall be conducted by a representative that is either registered or qualifies for an exemption or exclusion from registration in the state where the prospective client resides.

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Jeffrey R. Arsenault
Partner and Senior Wealth Advisor
(978) 557-5395
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